NAME OF RESEARCH

Georgian Railways - Good Changes Ahead

NAME OF AUTHOR

Bank of Georgia Research

CATEGORY

Transportation

YEAR

2013-12-11

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Georgian Railway is on track to deliver growth in the coming years after striking a new agreement to transport oil from Kazakhstan and expand into Black Sea ferry operations and truck cargo transportation via intermodal stations. GR also decided to re-visit its capex-heavy Tbilisi Bypass Project, which will boost profitability and free up cash if put on hold. Meanwhile, 9M13 financials were disappointing as the company failed to deliver growth and margins were lower due to higher salary costs. The drivers of the top-line weakness are temporary and it is expected that the rebound in sales which started in 3Q13 to continue through 4Q13, leaving annual revenues flat y/y.